20 October 2011 / Corporate
Toyota New Zealand Chief Executive Officer Alistair Davis addressed motoring journalists on the correlation between the state of the New Zealand economy and the growth of the new vehicle market at the launch of Toyota's latest iteration of the compact car, the 2012 Yaris.
Mr Davis said that the best long term solution to growing New Zealand's chronically low new vehicle market is to grow the economy, and to do that we need to export more.
He said that while New Zealand was enjoying the benefits of record commodity prices and was exporting agricultural products to the growing China market, our economic performance was still hampered by an under-performing export sector.
"We continue to be a domestic oriented economy, constrained by a small population, with little awareness that we need to further grow our exports, both in quantum and the diversity to grow our economic wealth," he said.
Commenting on the low level of new vehicle sales, Mr Davis said, "New Zealand has one of the highest levels of vehicle ownership in the world but one of the lowest rates of new vehicle sales based on population. Because our economy has not grown as strongly as others we've been forced to rely on imported used cars from Japan to maintain our vehicle ownership levels."
Mr Davis also commented that New Zealand's car sales had closely followed debt trends over the past decade with strong growth in the first seven years of the decade being funded by debt followed by a significant rebalancing in the past four years.
He said that up until the global financial crisis, changes of vehicle ownership in the auto finance market were running at 70,000 units per month, but have now slipped back to 65,000, with the number of registrations on the personal property security register (relating to motor vehicles) slipping even further.
"They were running at around 24,000 per month, but are now down at about 18,000."
Mr Davis admitted that while not a perfect assessment, the PPSR is a proxy for the financing of motor vehicles, with around 34 per cent of vehicles being financed, now down to about 27 per cent.
"In other words, Kiwis are adopting a more conservative approach to financing vehicles - and in addition many of the lower tier finance companies have disappeared."